REE Automotive Ltd. (REE) Reports First Quarter Loss, Estimated Revenue on Delays

REE Automotive Ltd. (REE) reported quarterly loss of $1.96 per share versus the Zacks Consensus Estimate of a loss of $1.81. For comparison, a year ago the loss was $2.40 per share. These numbers have been adjusted for one-off items.

This quarterly report showed an earnings surprise of -8.29%. A quarter ago, it was expected that this company would post a loss of $2.32 per share when it actually produced a loss of $3.11, delivering a surprise of -34.05%.

The company has failed to beat consensus EPS estimates over the last four quarters.

REE Automotive, which belongs to the Zacks Automotive – Original Equipment industry, posted revenues of $0.16 million for the quarter ended March 2024, missing the Zacks Consensus Estimate by 60%. For comparison, a year ago the revenues were zero.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

REE Automotive shares have lost approximately 8.6% since the beginning of the year compared to the S&P 500 index’s increase of 10.4%.

What’s next for REE Automotive?

While REE Automotive has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for REE Automotive is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$1.72 on revenue of $0.6M for the coming quarter and -$6.42 on revenue of $9.72M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Automotive – Original Equipment is currently in the bottom 35% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One more company in the same industry, ChargePoint Holdings, Inc. (CHPT), has not yet reported results for the quarter ending April 2024. Results are expected to be released on June 5.

The company is expected to report quarterly loss of $0.12 per share in its upcoming report, representing a year-over-year change of +20%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

ChargePoint Holdings, Inc. revenues are expected to be will amount to USD 106.09 million, which means a decrease of 18.4% compared to the same quarter last year.

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